MarketWatch | Refined Products Monday, 2, 2020

Market Commentary All NYMEX | Prior Settlements

Recap: Oil futures fell for the second straight month on Friday, as the rising number of COVID‐ ULSD (HO) Prior Settle Change In 19 cases in Europe and the U.S. increased concerns about the outlook for forward demand. Prices were down about 11% from the end of , as demand concerns led to increased Month Close Change One Week restrictions in both Europe and the U.S. Meanwhile, OPEC+ had planned to raise output by 2 Nov-20 1.0813 -0.0071 0.0700 million barrels per day in . WTI fell 38 cents, or 1.1%, to settle at $35.79 a barrel. This was the lowest finish for a spot month contract since , and a loss of 11% on the Dec-20 1.0859 -0.0010 0.0725 month. December Brent settled at $37.94 a barrel, down 32 cents, or 0.8%, the lowest spot Jan-21 1.0946 0.0013 0.0773 month settlement since 29, and down 8.5% on the month. November RBOB lost 0.2% to $1.0495 a gallon, down nearly 13% for the month. November heating oil shed nearly 0.7% to Feb-21 1.1038 0.0022 0.0813 $1.0813 a gallon — down almost 6% for the month. The November contracts expired at the end Mar-21 1.1128 0.0022 0.0838 of the day’s session. Apr-21 1.1197 0.0021 0.0853 Technical Analysis: Oil markets broke down this week, with coronavirus lockdowns set to put a May-21 1.1310 0.0019 0.0854 blow on demand. December WTI blew through $36.93 to ultimately reach the psychological Jun-21 1.1435 0.0019 0.0840 support level of $35. It appears that traders regrouped on Friday, with that session being an inside trading day. With the number of lockdowns most likely to increase, demand will surely Jul-21 1.1569 0.0018 0.0832 take a hit, and as a result, we could see a run toward the $30 level therefore, we would stick Aug-21 1.1697 0.0017 0.0821 with the game plan of looking for signs of exhaustion as selling opportunities. Resistance is set above at $36.93 and above that at $38.83. Sep-21 1.1832 0.0018 0.0806 Oct-21 1.1961 0.0020 0.0793 Fundamental News: According to a Reuters survey, oil prices will remain in the $40‐$45/barrel range for the rest of the year. A survey of 41 economists and analysts forecast global Nov-21 1.2080 0.0020 0.0783 benchmark Brent crude prices to average $42.32/barrel in 2020, slightly down from a previous Dec-21 1.2180 0.0020 0.0772 estimate of $42.48 and the $42.45 average so far this year. The outlook for 2021 was also reduced to $49.76/barrel from last month's $50.41 forecast. The survey forecast U.S. WTI Jan-22 1.2297 0.0020 0.0763 crude futures to average $38.53/barrel in 2020, compared with a previous estimate of Feb-22 1.2379 0.0018 0.0753 $38.70/barrel. Mar-22 1.2418 0.0017 0.0742 Oil traders are scouting for newly built supertankers to store diesel for the next few months as they prepare for lower demand in Europe amid renewed restrictions aimed at battling the COVID‐19 pandemic. Close Change Baker Hughes reported that U.S. energy companies added oil and natural gas rigs for the seventh consecutive week. The number of rigs searching for oil increased by 10 to 221, while Crude - WTI Dec Brent‐ $35.7900 -$0.3800 the natural gas rig count fell by 1 to 72 in the week ending 30th. Crude - Brent WTI Spread $37.4600 -$0.1900 According to the EIA, U.S. crude oil production in fell by 401,000 bpd to 10.579 million Natural Gas$1.67 ######### $3.3540 $0.0530 bpd from 10.98 million bpd in . U.S. total oil demand in August fell by 12.5% or 2.623 million bpd to 18.439 million bpd. U.S. distillate demand in August fell by 8.5% or 339,000 bpd Gasoline Jan-00 $1.0495 -$0.0020 to 3.663 million bpd, while gasoline demand fell by 13.4% or 1.313 million bpd to 8.508 million bpd. The EIA reported that U.S. total domestic crude shipments by rail totaled 235,000 bpd in August. Canadian shipments of crude by rail to the U.S. stood at 70,000 bpd. WTI Futures & Options: NYMEX & ICE Combined Managed Money Reportable Positions Petro‐Logistics reported that OPEC oil supply is expected to fall by close to 500,000 bpd in 600 November. 500 According to a Reuters survey, OPEC’s oil production has increased for a fourth month in October, as a restart of more Libyan installations and higher Iraqi exports offset full adherence 400 by other members to the OPEC+ output cut agreement. The 13 members of OPEC produced 300

24.59 million bpd on average in October, up 210,000 bpd from September. Thousands Open Interest Open 200

Early Market Call ‐ as of 9:02 AM EDT 100 WTI ‐ Dec $35.20 down 59 cents per barrel RBOB ‐ Dec $1.0077 down 2.45 cetns per gallon 0 HO ‐ Dec $1.0693 down 1.66 cents er gallon 01/02/ 2018 02/20/ 2018 04/10/ 2018 05/29/ 2018 07/17/ 2018 09/04/ 2018 10/23/ 2018 12/11/ 2018 01/29/ 2019 03/19/ 2019 05/07/ 2019 06/25/ 2019 08/13/ 2019 10/01/ 2019 11/19/ 2019 01/07/ 2020 02/25/ 2020 04/14/ 2020 06/02/ 2020 07/21/ 2020 09/08/ 2020 10/27/ 2020 Commitment of Traders Report for the Week Ending , 2020 Producer/Merchant Heat Positons Managed Money Heat Positons CFTC Commitment of Traders R eport CFTC Commitment of Traders R eport

300 120

100 250 80 200 Long Long 60 Short Short 150 Thousands Thousands 40 Number of Contracts of Number Number Contracts of Number 100 20

50 0 18-Jul-17 03-Jul-18 18-Jul-17 03-Jul-18 20-Oct-20 09-Apr-19 11-Oct-16 24-Apr-18 11-Oct-16 24-Apr-18 09-Apr-19 20-Oct-20 14-Jan-20 02-Jun-20 29-Jan-19 18-Jun-19 05-Jan-16 28-Feb-17 13-Feb-18 24-Mar-20 11-Aug-20 27-Aug-19 15-Mar-16 02-Aug-16 20-Dec-16 26-Sep-17 05-Dec-17 11-Sep-18 05-Jan-16 28-Feb-17 13-Feb-18 29-Jan-19 18-Jun-19 14-Jan-20 02-Jun-20 05-Nov-19 24-May-16 20-Nov-18 09-May-17 15-Mar-16 02-Aug-16 20-Dec-16 26-Sep-17 05-Dec-17 11-Sep-18 27-Aug-19 24-Mar-20 11-Aug-20 09-May-17 24-May-16 20-Nov-18 05-Nov-19 Week Ending Week Ending

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